Glaise na Rinne prices to be reduced

THE price of the new affordable units at Glaise na Rinne are set to be reduced.

At the Shannon Town Council meeting this week, it was said that valuations obtained by prospective purchasers indicated the amount sought for the houses is too much, which resulted in problems obtaining mortgages.

In a written report presented at the meeting, town manager Bernadette Kinsella stated, “The council has received 12 completed applications for the 16 affordable houses at Glaise na Rinne. Of these, three applications have been withdrawn due to difficulties in securing mortgage approval.

“The council is not aware of the reasons for refusal of these mortgage applications. This is a matter between the banks and the applicants concerned.

“Sales for two affordable houses were approved at the September council meeting. Since then, the council is aware that difficulty has been experienced in finalising mortgages for these two sales due to the valuation placed on the properties. The Housing Directorate has since been in discussion with the council’s valuer and has been informed that market conditions in relation to the sale of the affordable houses is changing on a monthly basis.

When the original affordable prices were set back in February 2012, the market in the Shannon area was stronger than most other areas of Clare. This was supported by a strong rental market. Since then, there has been a significant balancing of house prices and they are now nearly in line with prices in the urban area of Ennis.

It has also become clear that while additional costs were incurred in constructing the properties to a high-energy rating, this has not had a big influence on a purchaser’s decision when considering whether or not to purchase. Their biggest concern is affordability and mortgage approval.

“Another factor that may be influencing potential purchasers making a decision is the 20-year clawback that applies to affordable housing. Prior to the economic downturn, this was very relevant to purchasers as they could save a significant amount on the purchase of a property. In current housing market conditions, the difference between market value and affordable value has been greatly reduced and purchasers who can afford market values may prefer not to acquire an affordable house.

“The council is currently reviewing the pricing structure having regard to the foregoing.”

With regard to the six affordable units, she said four applicants wish to proceed with receiving them, while another two houses will be allocated to people on the council’s housing list.

Councillor Flynn also proposed that the Minister for Housing be informed about the development, to see if anything could be done to alleviate the losses incurred.

He also said that people have to have a suitable insurance valuation before banks release money, which people couldn’t obtain..

Councillor Patricia McCarthy said it was “disappointing that so many came up against the wall of not getting mortgage approval”.

She said she hoped those who have already been approved for houses will benefit from the reduction.

Councillor Tony McMahon said it is important that both the council and the department realise circumstances have changed dramatically since the houses were first proposed.

Responding to some of the councillor’s queries, Ms Kinsella said that since the values were set in February, the market had “changed considerably”.

She said the work done to make the houses energy efficient hadn’t been a significant influence on people’s decision to buy or not buy and clawback also seemed to be an issue.

With regard to the people from the council’s housing list to get the step-down houses, she said they would go to people who are elderly or have special needs.

Ms Kinsella said she expects there to be an increase in interest if the price is reduced.